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Saba Software, Inc. v. Deere & Co.

Court of Appeals of Illinois, First District, Fifth Division

September 30, 2014

SABA SOFTWARE, INC., Plaintiff-Appellee,
v.
DEERE AND COMPANY, Defendant-Appellant

Page 86

As Corrected.

Appeal from the Circuit Court of Cook County. No. 13 L 002088. The Honorable Joan E. Powell, Judge Presiding.

Affirmed.

JUSTICE GORDON delivered the judgment of the court, with opinion. Justices McBride and Taylor concurred in the judgment and opinion.

OPINION

Page 87

GORDON, JUSTICE

[¶1] On February 26, 2012, plaintiff Saba Software, Inc. (Saba), a Delaware corporation, filed suit in the circuit court of Cook County against defendant Deere & Company (Deere), another Delaware corporation, for money damages claiming: (1) breach of contract; and (2) restitution based on unjust enrichment. On April 22, 2013, Deere filed a motion to transfer the case to Rock Island County based on the Illinois venue statute, section 2-104 of the Code of Civil Procedure (735 ILCS 5/2-104 (West 2012)) and the doctrine of forum non conveniens Ill. S.Ct. R. 187 (eff. Jan. 4, 2013) (describing the process for forum non conveniens motions)). After a hearing, the trial court denied the motion.

[¶2] On July 26, 2013, Deere filed an interlocutory appeal pursuant to Illinois Supreme Court Rule 306 (eff. Feb. 16, 2011), which permits interlocutory appeals from certain court orders. Rule 306(a)(2) permits an appeal from an order allowing or denying a forum non conveniens motion, and Rule 306(a)(4) permits an appeal from an order granting or denying a motion for a transfer of venue based on the assertion that the defendant is not a resident of the county in which the action was commenced, and no other legitimate basis for venue in that county has been offered by the plaintiff. Ill. S.Ct. R. 306 (a)(2), (a)(4) (eff. Feb. 16, 2011).

[¶3] On August 28, 2013, the appellate court dismissed the appeal. Saba Software Inc. v. Deere & Co, No. 1-13-2381 (Aug. 28, 2013). Deere then filed a petition for leave to appeal, which the Illinois Supreme Court denied, but, pursuant to its supervisory authority, it ordered this court to vacate its prior dismissal order and to hear the appeal. Saba Software Inc. v. Deere & Co, 378 Ill.Dec. 737, 4 N.E.3d 1109 (Ill. 2014).

[¶4] In this interlocutory appeal, Deere argues that the trial court erred in denying its motion to transfer the case to Rock Island County. Deere contests the denial on two grounds: (1) that the trial court erred in failing to apply the Illinois venue statute; and (2) that the trial court erred in failing to properly apply the doctrine of forum non conveniens.

[¶5] For the reasons discussed below, we affirm.

[¶6] BACKGROUND

[¶7] On February 26, 2013, Saba filed the present suit against Deere in the circuit court of Cook County. The action seeks money damages for: (1) breach of contract; and (2) restitution for unjust enrichment. Both claims arose out of a dispute over a subscription agreement, which the parties entered into on February 23, 2011.

[¶8] To establish venue, Saba alleges in its complaint:

" Venue is proper in this Court because the transaction out of which the cause of action arose occurred in part in Cook County, Deere is authorized to do business in Cook County, and the parties explicitly consented to venue in any state court in Illinois, of competent jurisdiction-like this Court-to adjudicate issues arising out of or relating to the Parties' governing agreement. See 735 ILCS [5/2-101, 2-102 (West 2010)]; Subscription Agreement (as defined infra ), ¶ 10.7 [ sic ]"

[¶9] I. The Parties

[¶10] Saba describes the parties in its complaint as follows: Saba is a Delaware

Page 88

corporation with its principal place of business in Redwood Shores, California, and it provides software subscription services to its customers, including learning management systems.

[¶11] Deere is a Delaware corporation with its principal place of business in Moline, Illinois, and it is engaged in the business of agriculture and turf equipment, construction and forestry equipment, and related financial services.

[¶12] On February 23, 2011, the parties executed three documents: (1) the software subscription services agreement (the subscription agreement); (2) the statement of work; and (3) the product schedule. The subscription agreement is the governing written contract under which Saba agreed to supply Deere certain software services, including a learning management system. The statement of work provided that Deere would pay Saba $791,175 for these services under a fixed-fee arrangement.

[¶13] The subscription agreement includes provision 10.8, entitled " Venue," which states:

" The parties consent to the exclusive jurisdiction of, and venue in, any federal or state court of competent jurisdiction located in Illinois for the purposes of adjudicating any matter arising out of or relating to this Agreement."

[¶14] Saba's complaint states that the initial " go live" date for this project was in November 2011. The parties later reworked their plan to establish a new " go live" date of February 20, 2012. This dispute arose after the project was not completed by this date, and negotiations began to break down. Pursuant to section 9.1 of the subscription agreement, the parties met on August 2, 2012, at Deere's headquarters in Moline, Illinois, to discuss the dispute. When the meeting proved unsuccessful to resolve the dispute, the parties entered into mediation, pursuant to section 9.2 of the subscription agreement, which was held on November 5 and 6, 2012, in Chicago, Illinois. The mediation was not successful.

[¶15] II. Deere's Initial Lawsuit

[¶16] On November 6, 2012, following mediation, Deere filed a federal complaint against Saba in the United States District Court for Central Illinois based on diversity of citizenship. Deere & Company v. Saba Software, Inc., No. 4:12-cv-04105-SLD-JAG (C.D. Ill. 2012). To establish venue there, Deere alleged three bases in its amended complaint, including the venue clause of the subscription agreement: " Venue lies in the District pursuant to 28 U.S.C. Sections 1391 and 1404 in that *** the parties agreed in writing that Illinois is the appropriate venue for any litigation between the parties."

[¶17] On February 26, 2013, Saba filed a motion to dismiss under Rule 12(b) of the Federal Rules of Civil Procedure for, among other claims, lack of subject matter jurisdiction, because both parties are Delaware corporations and therefore the parties were not subject to diversity. Fed.R.Civ.P. 12(b)(1). On May 15, 2013, Deere voluntarily dismissed the federal suit without prejudice pursuant to Rule 41 of the Federal Rules of Civil Procedure.

[¶18] III. Motion to Transfer

[¶19] After dismissal of the federal action, Saba filed this suit on February 26, 2013, in the circuit ...


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